Industry | Financial services |
---|---|
Predecessor | Jantzi Research, DSR, Siri Company, GES International |
Founded | 1992 |
Founder | Michael Jantzi |
Headquarters | , |
Number of locations | 17 |
Products | ESG Research & Ratings, Investment Stewardship |
Owner | Morningstar, Inc. |
Number of employees | 1000+ |
Website | Sustainalytics |
Sustainalytics is a company that rates the sustainability of listed companies based on their environmental, social and corporate governance (ESG) performance. [1] The company was born of a merger between Toronto-based Jantzi Research, which was founded in 1992 by Sustainalytics' current CEO Michael Jantzi, and its European counterpart. [2] Following its acquisition of GES International on January 9, 2019, Sustainalytics had more than 600 employees with offices in 17 cities around the world and over 700 institutional investor clients. [3] [4] On April 21, 2020, Morningstar, Inc. acquired the remaining ~60% of Sustainalytics' shares to become the sole owner. [5]
In 2016, Morningstar, Inc. released the first sustainability rating for mutual funds and exchange-traded funds based on Sustainalytics' company ESG research. [6] [7] In 2017, Morningstar, Inc. become a 40% shareholder in the company alongside senior management, Stichting Pensioenfonds Zorg en Welzijn (PGGM), ABN AMRO Group and Renewable Partners [8] [9] On 21 April 2020, Morningstar Inc. completed the acquisition, purchasing the remaining 60% of the shares. [5]
In 2018, Yahoo! Finance started to include Sustainalytics' ESG score for over 2,000 companies. Retail investors will also be able to see if companies are involved in controversies or controversial products or practices, such as thermal coal and controversial weapons. [10]
In 2017, ING Group issued the first sustainability improvement loan where the interest rate of the loan is pegged to the sustainability rating of the lender, Koninklijke Philips N.V., as measured by Sustainalytics. [11] [12] Sustainalytics also provides "second opinions" for corporate governmental issuers that assesses the framework of the issuer's green, social or sustainability bond. [13] In 2017 and 2018, investors voted Sustainalyitcs as the "Most Impressive Second Opinion Provider" for this service in the GlobalCapital Sustainable and Responsible Capital Markets Awards 2017. [14] [15]
Sustainalytics flagged governance concerns at Volkswagen months before the 2015 Volkswagen emissions scandal. [16] Sustainalytics had also flagged corporate governance concerns at Fiat Automobiles 18 months prior to the company being accused of breaking emissions laws in 104,000 diesel vehicles in January 2017 [17]
In 2015, Harvard Business Review started to include Sustainalytics' ESG Rating as part of its assessment of the 100 best performing CEOs in the world. [18]
In 2000, Sustainalytics launched the Jantzi Social Index, the first socially-screened stock index composed of Canadian companies, and, in 2013, Sustainalytics partnered with the United Nation's Global Compact to launch the Global Compact 100 index, a real-time stock index that tracks Global Compact signatories awarded a high ESG rating by Sustainalytics. [19] [20] On 10 September 2018, the World Bank issued a sustainable development note linked to Sustainalytics' Global Sustainability Signatories Index, another index that tracks United Nations Global Compact signatories with high sustainability ratings. [21] The note will not pay a coupon, but rather return the principle in addition to the positive return of the index. [22]
Category | Issue | Contribution to ESG Risk Rating |
---|---|---|
Environmental 43.3% | Carbon - Own Operations | 19.2% |
Resource Use | 10.3% | |
Emissions, Effluents and Waste | 7.1% | |
Environmental and Social Impact of Products and Services | 6.7% | |
Social 34.1% | Human Rights | 22.8% |
Occupational Health and Safety | 7.5% | |
Community Relations | 3.8% | |
Governance 22.6% | Corporate Governance | 11.9% |
Business Ethics | 6.7% | |
Human Capital | 4.0% |
Morningstar, Inc. is an American financial services firm headquartered in Chicago, Illinois, and was founded by Joe Mansueto in 1984. It provides an array of investment research and investment management services.
BlackRock, Inc. is an American multinational investment company. Founded in 1988, initially as an enterprise risk management and fixed income institutional asset manager, BlackRock is the world's largest asset manager, with US$11.5 trillion in assets under management as of December 31, 2023. Headquartered at 50 Hudson Yards in Midtown Manhattan, New York City, BlackRock has 70 offices in 30 countries, and clients in 100 countries. BlackRock is the manager of the iShares group of exchange-traded funds, and along with The Vanguard Group and State Street, it is considered to be one of the Big Three index fund managers. Its Aladdin software keeps track of investment portfolios for many major financial institutions and its BlackRock Solutions division provides financial risk management services. As of 2023, BlackRock was ranked 229th on the Fortune 500 list of the largest United States corporations by revenue.
MSCI Inc. is an American finance company headquartered in New York City. MSCI is a global provider of equity, fixed income, real estate indices, multi-asset portfolio analysis tools, ESG and climate products. It operates the MSCI World, MSCI All Country World Index (ACWI) and MSCI Emerging Markets Indices among others.
Green lending refers to a lending dependent on environmental criteria for the planned use of funds. It is part of the wider sustainable investing and aims to reduce the impact on the environment of new lending activities. It includes green bonds (debt), green loans and sustainability-linked loans.
Socially responsible investing (SRI) is any investment strategy which seeks to consider financial return alongside ethical, social or environmental goals. The areas of concern recognized by SRI practitioners are often linked to environmental, social and governance (ESG) topics. Impact investing can be considered a subset of SRI that is generally more proactive and focused on the conscious creation of social or environmental impact through investment. Eco-investing is SRI with a focus on environmentalism.
Snam S.p.A. is an Italian energy infrastructure company.
Principles for Responsible Investment is a United Nations-supported international network of financial institutions working together to implement its six aspirational principles, often referenced as "the Principles". Its goal is to understand the implications of sustainability for investors and support signatories to facilitate incorporating these issues into their investment decision-making and ownership practices. In implementing these principles, signatories contribute to the development of a more sustainable global financial system.
Calvert Research and Management, established in 1976, is an investment management company that is headquartered in Washington, DC, and led by John Streur, the firm's President and Chief Executive Officer. Calvert is one of the largest responsible investment companies in the United States.
Environmental, social, and governance (ESG) is shorthand for an investing principle that prioritizes environmental issues, social issues, and corporate governance. Investing with ESG considerations is sometimes referred to as responsible investing or, in more proactive cases, impact investing.
Responsible Research Pte Ltd is an independent Environmental Social and Corporate Governance (ESG) research firm for global institutional asset owners and asset managers. Based in Singapore, Responsible Research analyses the ESG factors and regulatory landscapes that increasingly threaten portfolio returns in Asian markets.
ASTARTA Holding is a vertically integrated agro-industrial holding company in Ukraine, a public European company. It produces food products with a focus on global markets.
Institutional Shareholder Services Inc. (ISS) is an American proxy advisory firm. Hedge funds, mutual funds and similar organizations that own shares of multiple companies pay ISS to advise regarding share holder votes. As the leading firm in the industry, ISS commands a 48 percent market share as of 2021, with its nearest rival, Glass Lewis, holding a 42 percent market share.
The Sustainability Accounting Standards Board (SASB) is a non-profit organization, founded in 2011 by Jean Rogers to develop sustainability accounting standards. Investors, lenders, insurance underwriters, and other providers of financial capital are increasingly attuned to the impact of environmental, social, and governance (ESG) factors on the financial performance of companies, driving the need for standardized reporting of ESG data. Just as the International Accounting Standards Board (IASB) and the Financial Accounting Standards Board (FASB) have established International Financial Reporting Standards and Generally Accepted Accounting Principles (GAAP), respectively, which are currently used in the financial statements, SASB's stated mission “is to establish industry-specific disclosure standards across ESG topics that facilitate communication between companies and investors about financially material, decision-useful information. Such information should be relevant, reliable and comparable across companies on a global basis.”
RepRisk AG is an environmental, social, and corporate governance (ESG) data science company based in Zurich, Switzerland, specializing in ESG and business-conduct risk research, and quantitative solutions.
ESG Quant is an investment strategy, developed by Arabesque Partners, which involves quantitative equity investing while utilizing ESG information, often referred to as "non-financial" information. ESG Quant strategies are implemented within systematic trading or quantitative trading approaches that leverage a large and growing collection of commercial ESG, alternative and non-profit or academic datasets. As such, there is no human judgment or discretionary buy-sell decision making; rather, “in a pure quant model the final decision to buy or sell is made by the model” or through the “utilization of an expert system that replicates previously captured actions of real traders.”
NN Investment Partners was a Netherlands-based asset manager, with headquarters in The Hague and offices in 15 countries in Europe, Asia and the Americas. The company was acquired by Goldman Sachs Asset Management, the asset management division of Goldman Sachs in April 2022.
Trackinsight is a financial technology company headquartered in Biot, France. The company offers global Exchange-traded Fund (ETF) data and selection services for professional investors, advisors, institutions and ETF industry participants.
Rockefeller Capital Management (RCM) is an independent wealth management and financial services firm, founded in 2018. The firm offers family office, asset management, and strategic advisory services to high-net-worth individuals and families, institutions, and corporations. Its president and CEO is Greg Fleming.
The Responsible Investment Brand Index (RIBI) is a scale to evaluate the global asset management industry on its ability to demonstrate its commitment to sustainable investment into their respective brands. The annual index was created in 2018 by Jean-Francois Hirschel and Markus Kramer.
ATRenew formerly AiHuiShou is a Chinese circular economy operating two business systems - secondhand products trade and services system and urban green industry chain business. It is known as one of the leading environmental, social and governance (ESG) friendly companies in China. Headquartered in Shanghai, the company started as AiHuiShou in 2011 before being rebranded ATRenew in 2020. It has several subsidiaries including AHS Recycle and operates in partnership with JD.com, its largest investor before merging with ATRenew. The company’s stock is traded on the New York Stock Exchange.